Fresh economic indicators from Poland are due Monday while the Czech prime minister is expected to reiterate his commitment to reducing the country’s fiscal deficit.

In Warsaw, Poland’s statistical office will release February industrial output data that is likely to show a small slowdown due to inclement weather conditions and the European crisis taking its toll.

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Markets, which expect output to rise 8.7% annually, could react with higher bond yields and a stronger zloty should the data surprise on the upside, as it would add to fears the country’s central bank will tighten its monetary policy.

The central bank’s 10-strong panel kept interest rates unchanged in February, continuing the wait-and-see approach it adopted in mid-2011. The benchmark rate is now at 4.5%.

In Prague, the Czech Republic’s prime minister, Petr Necas, will speak at a conference on Czech and euro-zone economic issues.

Necas is likely to reiterate his goal to narrow the fiscal deficit amid the economic slowdown by increasing value added taxes and to further cutting public spending.

After lifting the lower of two VAT rates in January to 14% from 10%, Necas is aiming to lift the two rates likely later this year or early next year by one percentage point each, to 15% from 14%, and to 21% from 20%, respectively.

OTHER NEWS

POLAND: Poland on Friday floated former prime minister Jan Krzysztof Bielecki as its candidate to head up the European Bank of Reconstruction and Development (EBRD), the central bank said. Bielecki was formally “proposed by NBP governor Marek Belka for the four year term beginning in July 2012″, the National Bank of Poland’s press office said.

CZECH REPUBLIC: The Czech government is moving forward with plans to increase value-added taxes and to further cut spending to narrow the budget deficit, the country’s prime minister said Friday. “The government under my leadership will continue consolidating public finances, it’s a key task,” Petr Necas said after meeting with ministers on his economic council.

CZECH REPUBLIC: The governors of the Polish and the Czech central banks voiced differing views Friday on their countries’ aspirations towards joining the euro. Talking at a conference on central European economic policy in Prague, National Bank of Poland Governor Marek Belka said Poland remains committed to joining the single currency. But he warned that further political integration could be problematic for Poland, which is the largest ex-communist state in the European Union.

HUNGARY: The European Union’s executive arm hit back Friday at Viktor Orban after the controversial Hungarian prime minister compared EU officials to imperial and Soviet-era oppressors.

European Commission president Jose Manuel Barroso believes that “those who compare the European Union to the USSR show a complete lack of understanding of what democracy is in his view,” said his spokeswoman Pia Ahrenkilde Hansen.

“They also fail to understand the important contribution of all those who have defended and fought for freedom and democracy,” she told a news conference.

BULGARIA: Bulgaria’s competition watchdog said Friday that four of the country’s largest petrol station owners fixed fuel prices against competition rules.

About Emerging Europe

Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.